J&J And WuXi Build Innovation Ecosystem In China

On a journey to empower and enable innovators to set up asset-centric firms geared towards developing new products for the global market, J&J has partnered with WuXi to realize a goal of building a new innovation ecosystem in China, says J&J Asia Innovation Center Head Dong Wu in an interview.

BEIJING – The press release from Johnson & Johnson Innovation reads like a love letter. The message is clear: anyone who is a top-class innovator with assets that fit J&J’s focused areas, bring them on.

Already, through innovation centers in Boston, Menlo Park, London and Shanghai, J&J Innovation has put together 200 deals in under three years, adding new projects and products for novel drugs, devices and consumer products.

In its latest move, J&J is partnering with the major Chinese research services firm WuXi AppTec Inc. to target products that will be sourced globally and developed in China for the worldwide market. The collaboration will involve both partners contributing talent, facilities and funding to set up asset-centric firms with a focus on early-stage development.

The early-stage aspect is a key component to the innovation ecosystem, Dong Wu, head of J&J Asia Innovation Center, told PharmAsia News in a phone interview.

“China has great opportunities, with local biotech startups and academics that are really catching up,” Wu said. “There are also transformational prospects, and lots of venture capitals are coming from overseas. But they are geared towards late-stage; we want to move towards early-stage.”

Finding Entrepreneurs

Recognizing the vital role of talent to the success of the new venture, J&J and WuXi will leverage their respective networks to identify and select promising innovators and so-called scientific entrepreneurs, and provide them with licensing assistance and new company incorporation assistance.

The two partners will look around for asset opportunities. For J&J, this will include looking at both internal pipelines for candidates that could be licensed for China with data, and outside resources via its J Labs and other innovation centers, Wu said.

The plan is to select the top people and assets that fit J&J’s focused areas and then give them initial funding. After six to nine months of de-risking, venture firms to develop the assets will be officially formed in China, he added.

The partnership allows J&J to “identify and match assets and scientific entrepreneurs more quickly and efficiently,” said the company.

When asked about possible competition from others who are looking to tap into the same talent pool, Wu is not concerned. Rather, he sees things “as wide open in an open innovation space.

“I would say ‘go ahead’ and after all, finding disruptive solutions to healthcare issues is our end goal.”

The innovative initiative will also use what’s available in China. “On top of developing assets, we want to leverage regulatory [expertise], infrastructure and funding in China,” he said. When the J&J innovation center opened its doors last November, tapping into key partners has been high on the agenda (Also see "J&J Sees China Center As Key To Asian Partnerships" - HBW Insight, 10 Nov, 2014.).

WuXi will also help overcome the hurdles and reduce the risks. As a trusted CRO, the company is knowledgeable about preclinical and clinical studies and is also building biologics capabilities, which will bring value to the entrepreneurs and make the assets-centric firms slim, Wu emphasized.

All things considered, “We have prepared for failures,” Wu said.

During an earlier interview, J&J Pharma Worldwide chairman Paul Stoffels said that “the reason for being asset-centric is that we limit the amount of dollars going into the infrastructure.” (Also see "Six Questions For Janssen Pharma Chairman Paul Stoffels" - Scrip, 12 Nov, 2014.)

Training and nurturing is another aspect of the new initiative with WuXi, Wu pointed out. Entrepreneurs will gain considerably “from the range of scientific and technical R&D expertise, development know-how, transactional and legal counseling of J&J and WuXi.”

After five to seven years when the supported startup firms become mature and acquired by large companies, the entrepreneurs, armed with such broad experience, will be able to start other new enterprises and give back to the system.

This entrepreneurial bent is a playbook borrowed from Robert Urban, the head of the J&J Boston Innovation Center, Wu explained.

“An innovation ecosystem should not be copied from somewhere like the Bay Area” near San Francisco, he said, “But there are some fine components to a model. It’s a job that J&J is not doing it by itself, but we will do our own part to move part of the system forward.”

China Regulatory Readiness

Unlike the U.S. and UK where J&J’s other innovation centers are located, China has years of regulatory approval delays for clinical trial and new drug approvals, so is the country ready for such a bold initiative?

Recognizing that some positive changes are now taking place, Wu said that the company is working closely with the China FDA.

Such changes include a promise by Chinese regulators to erase the drug approval backlog, numbered at 18,600 products, in three years, following negations with the U.S. in bilateral meetings late last year (Also see "China Drug Approval Backlog Piling Up Fast" - Scrip, 18 Mar, 2015.).

Another key issue is multi-regional clinical trials (MRCTs), for which the CFDA has asked clinical study sponsors to go through a separate application and approval process for drugs that are filed using data obtained from such studies. The process will add additional time to an already lengthy process.

Again as a result of the bilateral negotiations, the CFDA has allowed any dossiers that were filed before December 23, 2013 to receive fast-track treatment (Also see "EXCLUSIVE INSIGHT: China To Clarify MRCT Regulatory Pathway Soon" - Scrip, 14 Apr, 2015.).

J&J’s prostate cancer drug Zytiga (abiraterone), for one, was recently approved by the CFDA.

Focused Approach

Despite the prospects, early-stage drug development remains a risky and costly business. J&J hopes to leverage its focused approach both in the new China project and more broadly to reduce the risks.

Since 2009, the firm has selected five therapeutic areas for concentrated R&D: immunology, infectious diseases and vaccines, neuroscience, cardiovascular and metabolism and oncology. The R&D organization was reorganized and pruned to focus on these areas with a larger emphasis placed on external partnerships.

“We can’t be everything,” Wu said, adding that for the focused areas, the company knows better and has the scientific judgement needed to make a decision. “We have the internal and external connections and know the tricky parts.”

In China, J&J has also unveiled a concerted disease strategy. With a focus on lung cancer, it brings together pharmaceutical, medical device and consumer products to tackle the disease (Also see "J&J Stresses New China Disease Strategy" - Scrip, 27 Jan, 2015.).

The new initiative in China thus focuses on these key fields and will help add potential drugs, devices and consumer products to internal pipelines. And for assets that are not interesting to J&J, it will facilitate connections with other companies, Wu said.

Action Speaks Loudest

For the time being, J&J Innovation is busy publicizing its love for innovators and drawing on its past success, with the team at the four global centers having reviewed over 2,000 proposals and made 200 deals, showing a solid track record.

Citing a study by Boston Consulting Group which ranked J&J as the most preferred partner for biotech startups, Wu said the appeal of the company relies on its actions. On June 11, it announced 17 agreements (Also see "J&J Innovation Maintains Frenetic Deal-Making Pace With 17 New Agreements" - Pink Sheet, 12 Jun, 2015.).

Similarly, action carries more weight in China, Wu said, citing a Chinese story in which a king was willing to spend 1,000 ounces of gold for a horse that could travel a thousand miles a day. But when he finally found one, the horse was dead.

When his servant bought the dead horse for 500 ounces of gold of the king’s money, he became upset and confused. The servant explained that if everyone knew that the king was really serious and willing to spend that much even on a dead horse, they would bring other great horses forward.

Within one year, several horses have indeed been brought forward.